S&P 500 Index Trading Outlook (3-5 Days): Bullish
Prices moved back above last Friday’s highs which is bullish.
While the S&P 500 Index is now overbought on an hourly basis, it has achieved some structural progress that necessitates a bullish stance.
This postpones further weakness, at least for now.
The NASDAQ is far stronger than the S&P 500 or Dow Jones Industrials so it’s important to watch this theme for any evidence of a change.
As mentioned, the S&P 500 structurally did show some improvementon Tuesday’s close over 3285 on the cash index and 3297 on S&P 500 Futures.
While the hourly momentum has gotten overbought, pullbacks should prove minor at this time and it’s thought that the S&P 500 will join the NASDAQ back at minor new highs into next week before any stalling out. In order to reinstitute a bearish stance, prices will need to undercut 3214. Initial targets on the upside now focus on prior highs at 3337 up to 3345
The NASDAQ Composite and NASDAQ 100 both made sharp moves back to new highs yesterday.Â
They are structurally in even better shape than the S&P 500. Thus, it’s wise to follow the strength and/or weakness of the NASDAQ here. The NASDAQ never actually broke its trend line from October on the pullback (like the S&P 500 did). Thus, this will be something to watch carefully for in the back half of February. For now, additional gains here look likely.
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Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
